Consultants will now be rostered on a 24/7 basis and available for work for any five days out of seven as opposed to weekdays, as is currently the case.

"On behalf of myself and the Government, I wish to stress the importance of this agreement," Dr Reilly said.

"The consultants' organisations have shown considerable leadership in agreeing to recommend these crucial changes. The impact of what has been agreed has a vital financial benefit and, of greater importance, it paves the way for the more effective treatment of patients as we continue to reform our health services for the better in the interests of patients."

The Department of Health said the new contract and working arrangements will reduce costs by 200 million euro a year. In future, new consultants will be appointed on a new entry level pay rate - significantly reduced from the current starting level, the department said.

But the Irish Hospitals Consultants Association has not signed up to this.

"It is a matter for Government policy. The decision has been made and the initiative will proceed," the department said. The reduced pay rate will allow for more senior doctors to be appointed to hospitals and ensure more consultants are available for patients.

The deal, brokered at the Labour Relations Commission, changes the way in which hospital beds are used for private and public patients and allows greater effectiveness in the organisation of day-to-day work in hospitals - and a greater capacity for efficient forward planning.

"In simple terms, with these changes we will be able to treat more patients more quickly," the department said.